1. ENTREPRENEURSHIP 3209 Supply & Demand

2. SUPPLY AND DEMAND  Supply is the amount of a good or service that producers are willing and able to supply at a specific price.  Demand is the amount of a good or service that people are willing and able to buy at a specified price.

3. LAWS OF SUPPLY AND DEMAND  Law of Demand:  The economic principle that demand goes up when prices go down and demand comes down when prices go up.  Law of Supply:  The economic principle that supply goes up when prices go up; and supply goes down when prices go down.

4. ELASTICITY  If the quantity demanded changes a lot when prices change a little, the product is elastic.  When there is a small change in demand when prices change a lot, the product is inelastic.  Elastic – products that we might not buy if the price goes up too high (e.g. Cars, furniture, lottery tickets)  Inelastic – products that are necessities, so we will buy them regardless of price (e.g. medication, basic food items)

5. ELASTICITY  Even goods with an inelastic demand can become elastic over time.  People learn to live without things (e.g. gasoline prices)

6. FACTORS THE INCREASE/DECREASE DEMAND  Changing customer income (more $ they make, more they buy)  Changing consumer tastes (fads/trends)  Changing expectations for the future (if consumers think prices will increase soon, they will buy more)  Changes in population  Availability of substitute products of services (other products might be available at better price)

7. FACTORS TO INCREASE/DECREASE SUPPLY  Changes in numbers of producers (increase in producers will increase supply)  Changes in price (if price falls, people may stop producing – e.g. fish)  Changes in technology (reduce  Changing expectations for the future (predictions of future trends)  Changing production costs (increase or decrease of supplies)

8. INTERRELATIONSHIP BETWEEN DEMAND, SUPPLY AND PRICE  If demand is high while supply is low, prices tend to be high  If demand is low while supply is high, prices tend to be low  Equilibrium price = when the quantity of goods producers are willing to supply at a certain price matches the quantity of goods consumers are willing to buy at that price. (SUPPLY = DEMAND)

9.  Overproduction – when supply exceeds demand  Shortage – when demand exceeds supply

10. DEMAND CURVES  Inelastic Demand Curve:  Positive Relationship  Positive Slope  Elastic Demand Curve  Negative Relationship  Negative Slope

11. PORTFOLIO  Business in the News:  Collect and analyze 10 news stories during the course of the year.  First one is due end of September  Must be recent articles (within last 2 years)  Possible Topics:  The role technology has played in the evolution of a company or product  The connection between supply, demand and price of a product or service  Changes or challenges facing a sector of the economy  Innovation that resulted from meeting consumer demand  Challenges, risks and strategies used by a new local business  Challenges, risks and strategies used by a long established business  Unethical behaviour of a business  A business demonstrating social responsibility  A successful entrepreneur

12. PORTFOLIO  The articles in the portfolio should include the followingL  A copy of the article  Source and the date of publication  Analysis (get sheets from Ms. Winsor or msbeckywinsor.weebly.com  The portfolio should be submitted as a binder, scrapbook, or blog. It should include a Table of Contents.